Category Archives: Arbitral Award

Arbitral Award – Correction of Errors

In Mcdermott International Inc. v. Burn Standard Company, (2006) 11 SCC 181, it was held as under:

            “Section 33 of the Arbitration and Conciliation Act empowers the Arbitral Tribunal to make correction of errors in arbitral award to give interpretation of a specific point or a part of the arbitral award and to make an additional award as to claims, though presented in the arbitral proceedings, but omitted from the arbitral award. Sub-section (4) empowers the Arbitral Tribunal to make additional arbitral award in respect of claims already presented to the Tribunal in the arbitral proceedings but omitted by the Arbitral Tribunal provided:

  1. There is no contrary agreement between the parties to the reference;
  2. A party to the reference, with notice to the other party to the reference, requests the Arbitral Tribunal to make the additional award;
  3. Such request is made within thirty days from the receipt of the arbitral award;
  4. The Arbitral Tribunal considers the request so made, justified; and
  5. Additional arbitral award is made within sixty days from the receipt of such request by the Arbitral Tribunal.”

The powers under Section 33 (4) of the Arbitration and Conciliation Act cannot be invoked for raising fresh claims or seeking an appeal against the arbitral award. The powers of the Arbitral Tribunal in these proceedings are restricted to making an award for such claims which formed a matter for adjudication and on which the parties had led arguments. Pramod v. Union of India, 2019 (1) AWC 969.

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Arbitral Award – Extension of Time

Section 29-A of the Arbitration and Conciliation Act, 1996 provides for the award to be made within a period of twelve months from the date the arbitral tribunal enters upon the reference. Sub-section (2) provides for an incentive in the form of fees to the arbitral tribunal if the award is made within a period of six months from the date the arbitral tribunal enters upon the reference. Time for making award as provided under sub-section (1), may be extended with the consent of parties for a further period of not exceeding six months. In the event, award is not made within the period specified under sub-section (1) or the extended period specified under sub-section (3), the mandate of the arbitrator(s) shall terminate unless the court has, either prior to or after the expiry of the period so specified, extend the period, provided that while extending the period, if the court finds that the proceedings have been delayed for the reasons attributable to the arbitral tribunal, then, it may order reduction of fees of arbitrator(s) by not exceeding five percent for each month of such delay. Thus, while sub-section (2) provides an incentive for disposal of arbitration proceeding within a time bound period, sub-section (4) provides for reduction in fees of the arbitral tribunal in the event award is not made within a period of twelve months or within extended period of six months.

      The power to extend the period is vested in the parties who may extend the period by consent upto six months. The power to extend the period vested in court under sub-section (5), is required to be exercised by the court on application of mind. The period can be extended by court only for sufficient cause and on such terms and conditions as may be imposed by the court. Sub-section (6) further confers power to the court that while extending the period referred to in sub-section (4), it may substitute one or all of the arbitrators and if one or all of the arbitrators are substituted, the arbitral proceedings shall continue from the stage already reached and on the basis of the evidence and material already on record, and the arbitrator(s) appointed under this section shall be deemed to have received the said evidences and material. The arbitral tribunal so reconstituted shall be deemed to be in continuation of the previously appointed arbitral tribunal. To discourage the delay in conclusion of the arbitral proceedings, the court has been conferred power under sub-section (8) to impose actual or exemplary costs upon any of the parties. Jairath Constructions v. Triveni Engineering and Industries Ltd., 2018 (5) AWC 4676.

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Arbitral Award – Includes Interim Award

As can be seen from Section 2 (c) and Section 31 (6), except for stating that an arbitral award includes an interim award, the Act is silent and does not define what an interim award is. Section 31(6) of the Act delineates the scope of interim arbitral awards and states that the arbitral Tribunal may make an interim arbitral award on any matter with respect to which it may make a final arbitral award.

The language of Section 31(6) is advisedly wide in nature. A reading of the said sub-section makes it clear that the jurisdiction to make an interim arbitral award is left to the good sense of the arbitral Tribunal, and that it extends to “any matter” with respect to which it may make a final arbitral award. The expression “matter” is wide in nature and subsumes issues at which the parties are in dispute. It is clear, therefore, that any point of dispute between the parties which has to be answered by the Arbitral Tribunal can be the subject matter of an interim arbitral award. However, by dealing with the matter in a piecemeal fashion, what must be borne in mind is that the resolution of the dispute as a whole will be delayed and parties will be put to additional expense. The Arbitral Tribunal should, therefore, consider whether there is any real advantage in delivering interim awards or in proceeding with the matter as a whole and delivering one final award, bearing in mind the avoidance of delay and additional expense.

To complete the scheme of the Act, Section 32(1) is also material. It goes on to state that the arbitral proceedings would be terminated only by the final arbitral award, as opposed to an interim award, thus making it clear that there can be one or more interim awards, prior to a final award, which conclusively determines some of the issues between the parties, culminating in a final arbitral award which ultimately decides all remaining issues between the parties. M/s IFFCO v. M/s Bhadra Products, 2018 (129) ALR 927.

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